Governor Isn?t Disclosing Fiscal Problems to Investing Public.
Five Republican members of the Senate Budget and Appropriations Committee have filed a complaint against the Corzine administration with the U.S. Securities and Exchange Commission (the SEC). The SEC is the agency responsible for ensuring that issuers fully disclose the risks of buying their bonds to potential investors.
The Corzine administration, through its Web site, has encouraged average people to buy School Construction Bonds and other debt. The administration has given these average citizens and other potential investors marketing material that fails to disclose the full extent of the State?s fiscal problems. The Complaint asks the SEC to order the Corzine administration to fully disclose the truth about the New Jersey?s poor fiscal situation so that investors can make informed decisions about where to put their money. Among the details absent from bond market materials are disclosures of a growing, multi-billion dollar deficit in the fund that pays unemployment claims, the pending insolvency of the fund that pays for transportation projects, and a warning that more than $1 billion in taxes have been labeled ?temporary? by the administration and therefore will not be available next year to balance the budget.
?Like some big Wall Street banks, the Corzine administration is telling half truths to entice investors to buy,? said Senator Tony Bucco, R-Morris, Senate Republican Budget Officer.
?The economic meltdown has provided a clear picture of what happens when financial problems are papered over and investors don?t get the whole truth,? said Senator Kevin O?Toole, R-Essex and Bergen.
?If the Corzine administration asks the public to lend the state money, the least it can do is give investors the whole truth about New Jersey?s ailing finances,? said Senator Steve Oroho, R-Sussex and Warren.
?Governor Corzine has long refused to admit to himself or the public the extent of the fiscal mess that he and his allies have created,? said Marcia Karrow, R-Hunterdon. ?It?s time to come clean.?
?My legislation would require transparency. It wouldn?t be necessary to file this complaint if Governor Corzine had really put his support behind that bill,? said Senator Joe Pennacchio, R-Morris.
A copy of the complaint is attached. It seeks nothing more than to have the SEC force the Corzine administration to provide a more complete picture to potential investors in its debt in order to avoid potential lawsuits against the State should bond deals go bad.